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People aren't fired over the holidays, but the holidays are about to end, and the impact of the worldwide financial crisis on real economic activity is about to hit Israel too, judging by conversations with managers.

The conversations show their uncertainty, and there's certainly no consensus. But heavy layoffs seem likely as companies slam the brakes on investments and can't raise a sou, as clients balk at bills, and as client markets vanish overnight.

The first to suffer, it seems, will be staff at startups and small to medium high-tech companies, which have the least financial breathing room. Pessimists predict that 30% of the manpower in the sector will be laid off.

"We're completely dependent on cash flow," admits D., a high-tech CEO. "Our big clients just vanished one day. If clients aren't paying or are halting projects, and investors aren't releasing money, we can't survive beyond another quarter or two."

Another high-tech personality, Arie Scope, ex-manager of Microsoft Israel and today a board member at several startups, says he's been getting "weird letters" from venture capital fund managers. "They write what every child knows, that times are tough, be cautious, it's hard to raise money, stop hiring. What do they think, that managers don't realize that already?" Scope says.

He accuses the funds of shying from their responsibilities, wagging fingers and "covering their asses" instead of being practical.

Oren Most, another technology personality and investor in telecom startups, has good and bad news: "Our venture recently decided it has to let 40% of its manpower go," he says. "But part of the money saved will be used to hire talent to help us through the crisis." Iffy ventures are doomed: ones with good development plans will be cut back, but will survive, Most says. Before firing, Most says, they're suggesting 25% pay cuts.

But L., manager of a high-tech firm with 100 workers that targets the U.S. market, says he has two contingency plans: One is to fire 20% of the staff, and the other is to fire 40%.

Before firing, companies are slashing pay and abolishing overtime. But the assumption that big companies are less likely to cut jobs can't be relied on: Comverse, for example, is firing 150. Workers at foreign branches of big companies are safe if their outlet is profitable, but R&D center workers may be in trouble because of investment cutbacks.

At investment houses, workers are just waiting for the letters of dismissal, but bank workers are safer.

"We won't touch our staff," vow advertising executives, too; time will tell if that's so.

Public-sector workers can also sleep well. Given their collective employment agreements and union protection, they'll be among the last to be hit.

Not everyone is despairing. Intel Israel sources say they aren't discussing layoffs at the moment. Dov Moran, CEO of the cellular technology startup Modu, insists, "The situation is extreme and extraordinary, but we're in reasonable shape."

But in the finance sector, layoffs loom large. A top figure at a leading investment firm says the companies hired massively during the boom, mainly young salespeople who were trained and unleashed. They don't cost much to maintain, but in the pullback, the flab inevitably will be fired, he says.

"Profits are down and a lot of people panicked and withdrew money," says a top manager at another investment firm. The crisis became full-blown just before the holidays. Now that they're ending, she says, it's time to reevaluate. "But soon enough, the layoffs will start," she adds. They have, actually: Migdal Capital Markets has already dismissed 23 and Gaon Holdings fired nine.